Money is important to you, right? After all, you need to pay the bills, put food on the table, and treat yourself to something nice once in awhile. However, you may be one of the many people who make mistakes with your money on a daily basis. Understanding what they are will set you up for a better financial future. Take a look at these common errors and follow our helpful advice.
1. Not budgeting
You can’t take control of your finances if you don’t have a budget plan in place. You need to know exactly how much you are spending each month, from your household bills to your shopping expenses. If you are spending more than you earn, you are going to run into serious financial trouble. Use the budget planning tool at moneysavingexpert.com if you need help in managing your money.
2. Not saving money
It can be difficult to save money each month when you are living from paycheck to paycheck. However, if you used the budget tool we mentioned above, you should find ways to cut back on your spending and use the extra you have running over each month for your savings. Even if you are only saving a little, it will soon add up, helping you deal with any emergency situations that happen around the home. Opening up a savings account with your bank is also a good idea, and you may be able to gain a little interest on what you are putting in each month.
3. Missing payment dates
If you don’t make your payment dates on time, you are going to get in trouble with your creditors. Loan providers, such as banks and credit card companies, will charge you late fees if you fail to pay up on or before the required date. Not only will you be wasting money by failing to pay on time, but you will also affect your credit score. There are a number of ways around this. For starters, set up a direct debit, so you don’t have to worry about remembering the payment date. Then cut down on the number of loans you are paying by consolidating your debts. There is some helpful advice at debtconsolidation.co that explains the process in simple terms.
4. Paying too much money on bills
We jump for joy when the mailman shows up at our door, and then hide under our duvets when we realise the only thing he is delivering that day is a red letter bill. Overcome your dread, and follow the advice we gave you at skullmadmama.com. From changing your energy provider to creating better habits around the home, you can make considerable savings each month. No longer will you need to seal your mailbox shut with superglue in fear of the next bill!
5. Borrowing from family and friends
You may be tempted to ask for a ‘loan’ from your family and friends when you find yourself in a tight spot. They may be willing to help occasionally, but you may put a strain on your relationship with them if you make it a habit. You will feel guilty if you struggle to pay them back, and you may avoid contact with them to relieve the sense of awkwardness. There are better ways to manage your money, as we have already discussed, and you can take out lower interest loans if you need something urgently. So, our advice is, don’t turn to them unless it’s your last resort.
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